Tag Archives: how to save taxes

Provocative International Tax News

offshore tax planning, offshore tax strategies, controlled foreign corporation,

Tax Planning Small Business Are Taxed at 14%

Government Report Shames Businesses Paying More than 14% in Taxes.    Hard to believe that Senator Bernie Sanders  (who paid tax at 13%) released the report.  It states that a business that plans its taxes are taxed at 14%. Here’s what’s going on.    

saving taxes, how to save taxes, tax planning,

Saving taxes with an IRS approved tax plan is called a private letter ruling.

International Gift Tax Plans with this IRS internal letter on this link. Fantastic legal tax avoidance for the foreign person with family in the U.S. is explained in this letter.

  • Avoiding state income taxes this new IRS  designer  Nevada trust.  IRS tells how to use your Nevada corporation as your trustee to legally stop paying state taxes on your investment income. Here’s what’s happeningon this link.

New- Department of the Treasury letter to the U.K. tax authorities on U.S.  tax planning for UK and EU companies. Here is the letter from the U.S. to the U.K. 

Be an IRS tax wizard with our new custom Google search, on this link.  This custom Google app to read 300,000 pages deep inside the IRS’s website and the tax court’s website and it is free!.  Find the answers to your tax question quickly and accurately.

Tax planning, with the Supreme Court common tax laws

Tax planning with Supreme Court common tax laws

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a significant defeat.  Here is what happen.   The Supreme Court is the “Law of the Land.”  It rules over the IRS and Congress.   

It works both ways.  The blog on this link explains the most missed Supreme Court Doctrine used by the IRS to blow up this offshore plan.

international tax planning, international, tax, planning,

International tax planning and international tax savings with this Treasury Department report. 

The secret report on tax savings international tax plans that the IRS cannot stop was issued by the U.S. Department of the Treasury (a branch of the White House).

They reported the successful foreign tax plans of international businesses. We have obtained a copy.  It is on this link.   Here you will learn the legitimate foreign tax plans that Congress likes. 

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,    Since the Middle Ages, the wealthy have capitalized on trusts to avoid paying taxes. During the Great Crusades, upon the death of a knight, his entire estate went to the king.    Nine hundred years later, things have not changed much except the ‘King” takes only half.

Trusts are the most efficient tax tool. International tax planning should start with a Nevada trust to own the foreign company.  Learn trust tax planning and asset protection in this easy to read blog post.    It has the blueprint for successful trust tax planning.   IRS memo on asset protection and tax planning with an offshore trust.  Get it now on this blog post.

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the offshore cloud computer. 

Cloud tax planning. Learn how businesses are using the cloud to avoid taxes on this link.  E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.
Is the U.S. a tax haven for citizens of the UK, Sweden, Belgium, Canada, Luxembourg, and Austria?  Yes, says the IRS in its Publication.  Learn the magic Tax Treaty words for these lucky citizens of The UK, Sweden, Belgium, Canada, Luxembourg, Austria on this link.

President John Kennedy – Our Obligation to Avoid Taxes and to Use Our Talents for the Benefit of Society

Just a short blog post that I hope we provide what I call “staple news”.   The chaos not only between the two parties but in the two parties can cause us to forget the tried and true course.   I picked President John F. Kennedy because he is the darling of the Democrats and those that call themselves liberals.

small business tax planning,

President John Kennedy (Democratic) is the most important president of last century. The President and Supreme Court Justice Holmes agreed… it is your duty to pay the least amount of taxes.

Yet, many of those same people have hatred towards independent voters that support the dreams and economic policies of this great President.

The photograph on the left says it all. While a government job is better than no job, it requires the Government to take (also known as steal) money from a non-government worker. A government job does not create a car, food or exports. The ideal job for a country is one that makes the country wealthier.

If you have a small business, this link has five sophisticated tax plans that your CPA may not have explained to you.  They are used the wealthy and the rich to avoid taxes so that they can create more jobs.

And there is more. Those the have the advantage of a higher education have an obligation to protect the Country by helping the population become educated. I have heard complaints about those that voted for President Trump. If you do feel that way, then please listen to JFK in this video below.

Avoiding Taxes Requires Watching the Politics of a Nation with a Huge National Debt

Successful tax planning looks for trends.  Tax planners look down the road and around the bends.  They structure now for tomorrow.   They don’t rely on year-end tax planning.

A recent article (in France) jumped out at me as I read about the American Republican Parties pretending to “reform” taxes.   France government subsidies and immigration are worst than the U.S. (thankfully).  However as the U.S. National debt combine with many states and cities facing insolvency, the battle between the have nots and the have is  looming.   New York has proposed a new tax that applies only to the haves.

Keep in mind, as you read this article, former President Obama, at an Orange County rally, told the audience those with household incomes exceeding $250,000 were the “rich”.   The $250,000 threshold continues to be the red line in the United States.   

You think it can not happen in America?  Since Democrat  Jerry Brown became governor, income taxes have increased by 30%.  The U.S, has had a tax rate up to 94%.  Add to that your state income taxes, I hope you can see that you must plan now for the future. 

Keep this in mind as you read this article.  

For your small business tax planning, you should watch the trends… which is higher taxes unless you are active in tax planning.   Great tax planning is not year end tax planning.  It is long term with a separate plan for each part of your business. 

I had the article translated  and it is below . 

Economic inadequacy or social justice? For thirty-six years, “the tax on the rich” made controversy. Emmanuel Macron wants to reform it, distinguishing between real estate and financial investments.

Continue reading

Treasury Department Leads the Way in Saving Taxes and Protecting Assets with a Foreign Trust

saving taxes, how to save taxes, tax planning,

Saving taxes by requesting a private letter ruling from the IRS National Office.

At the end of last century, the Department of the Treasury led the way in making foreign trust attractive.  The IRS issued a legal memorandum providing the blueprint for protecting assets and saving taxes. 

Nevada  provides unique asset protection for these trusts.  A new IRS regulation allows the Nevada trust to be classified as a foreign trust. 

The tax advantage of a foreign trust is its classification as a “grantor trust.”  This tax plan uses a special asset protection section of the tax code, section 679.

Unlike a domestic trust, all assets transferred to a foreign trust are allowed “grantor trust” status (with one tax planning exception explained below).  They are also excluded from the taxable estate of the settlor.

As a “grantor trust,” the tax law allows the transfers of assets to the trust to be income tax-free.  Thus, you can do what you want to protect your assets and reduce estate taxes without worrying about income taxation.  

This IRS blueprint on foreign trust tax planning is the explained in this episode of my radio show, Tax Talk below.

The play time is about 22 minutes.  Or, If you would like to brainstorm your tax planning, then please call me, Brian Dooley CPA, at 949-939-3414 for a consultation.

If you want to defer income taxes, then fund the foreign trust with a loan due within five years.  Such a loan is called a “qualified obligation.”  This makes the trust a tax deferral vehicle.  The tax deferral can last for more than a century.  This type of a trust is named “non-grantor foreign trust.” 

The IRS Form 3520-A (filed by the trustee) details the tax planning structure for a tax-deferred foreign trust.  You will want to use the “qualified obligation” found on page 3 of the Form 3520 (filed by the settlor).   

Learn the basics on offshore trust on this short video.  Be an expert with my easy to read book, International Taxation in America, available at Amazon.

Learn about the Small Business Foreign Tax Credit and How the Credit Saves Taxes

How the  Foreign Tax Credit Saves Taxes for an S-corporation of a Limited Liability Company (LLC)

When you read about Apple or GE not paying American taxes, it is because of the foreign tax credit (for taxes they paid to the foreign government).   

The purpose of the foreign tax credit law is to avoid double income taxation. It works well for publicly traded corporations. However, it does not work for individual owning a foreign entity unless he does fancy footwork to have the entity be a “pass-through” for the IRS.

Here is the problem: For the individual shareholder, income earned by a foreign corporation does not allow you credit for the foreign income taxes  Why?  No reason.  It is just the law, and yes, it is not fair.  Just keep reading for the solution. 

If the corporation has paid an income tax, you are not allowed to offset your US tax. You will pay tax twice. First, the corporation will pay the foreign tax.

Next, you will pay US (and state) income tax on the Subpart F income or when the corporation invests in US property or when you receive a distribution (whichever event occurs first).

Here is the solution.  Your foreign corporation needs to change to or elect to be a pass-through entity for U.S. tax law.  Three type of pass-through entities exist.  They “disregarded,” “partnership” and “Subchapter S corporation.”  These topics are discussed in my book.  However, first I would like to explain the issue with a hypothetical example.:

You own a foreign corporation doing business in the United Kingdom. The corporation’s net income in the tax year is $1,000. The UK income tax $250. Your corporation invests its profits in the US stock market. You have a “deemed dividend” of $750 taxable to the US. Your US tax is an additional $250. Thus, of the $1,000 earned, your worldwide tax is $500.

Once you are allowed the foreign tax credit, you use IRS  Form 1116  or Form 1118 to claim your money.

Here is the best international tax strategy: The UK corporation becomes a “pass-through” entity for US tax purposes. Some, not all, foreign corporations can elect to be a “disregarded entity.”

A corporation that does not qualify for the election can arrange to have a charter as a domestic corporation. This is known as “dual resident corporation.” At this point, the corporation is both foreign (UK) and domestic. As a domestic corporation, the corporation can elect to be a Subchapter S corporation.

Back to the example, the $1,000 of income passes through to your individual income tax return. The $250 UK corporate income tax is a credit against your US income tax. You are U.S. taxable on $1,000. Assuming a US income tax of $300, your tax after the foreign tax credit is $50.

As a pass-through entity, none of the controlled foreign corporation rules applies. 

Learn how the foreign tax credit works and how you can save money with my easy two-hour to read book,  International Taxation in America for the Entrepreneur.  Learn more on this link or call me, Brian Dooley, CPA, MBT, for a free foreign tax brainstorming consultation at 949-939-3414